InstaForex

September 23, 2021

Recent Currency Movements Before the Fed Triggers Chaos

 The cautious movement of the currency graced the European session markets ahead of the Federal Reserve’s (Fed) policy announcement and as issues about Evergrande had gradually subsided.


The real estate giant in China has promised to pay off their debts and this has provided some relief for investors. The People’s Bank of China (PBOC) has injected more liquidity into the market.


Investors' attention is now shifted to the outcome of the FOMC policy meeting in the early hours of Thursday morning which is expected to keep monetary policy unchanged. Still, investors are expecting a clearer signal from the Fed about when the reduction in asset purchases will begin.


At the time of writing, the dollar index, which measures the strength of the greenback against six major currencies, is trading at 93.23.



The Aussie dollar and kiwi, which soared at the start of the Asian session, returned to cut gains after reactions from news about Evergrande had previously begun to wane.


Meanwhile, the euro traded little changed as investors were seen to be more cautious in positioning ahead of important announcements from the US central bank.


The pound, meanwhile, continued to trade gloomily around a one -month low, as investors assessed the steps the Bank of England (BOE) will take at a policy meeting tomorrow.


Meanwhile, the Bank of Japan (BOJ) left interest rates unchanged as expected. The movement of the yen was more influenced by the Evergrande crisis which traded around 109.50 against the USD.